Thread: FireWeatherMet Account Talk

Exited COB Today into the G fund.

Reasons were being possibly overbought in the short term (Small caps up nearly 10% in 11 days) and ability to lock in recent gains and get back in after only 2 more trading days.

I also look at the Tracker this time of the year and the smart money tends to be a useable trend. I also look at the Tracker this time of the year and the smart money tends to be a useable trend. Noticed that most of the top 5 have also backed out into the G (below)

Tracker.jpg

On the longer term view, its hard to avoid looking at the technical damage done in the past few months. This visible on all indices but most prominent in small caps (below) where an over extended upsurge has ended in what appears to be a volatile spiking top...along with a recent lower low.


S Fund.jpg

Speaking of volatility, the VIX has also changed course from the past few years, and NOT for the better. Its also up more than 8% today (not yet seen on charts)

VIX.jpg

Maybe these are all just aberration to be ignored...but I'll take that chance with 2 days left in the month before a fresh set of moves.
Fearing a "sell the news" short term event regardless of what Fed says...but with the Fed you never know.
Just hoping for an upward afternoon reversal to todays morning action after Fed announcement.

I will exit from 50% S and 50% C into 100% G COB today.

Reasons were multiple, one being the feeling things were over-bought in the short term,particularly small caps up 10% in 11 trading days (albiet up from a deep bottom).
Might not have exited if we were earlier in a new month but with only 2 trading days left before a fresh set of moves, risk of missing a ton of upside is minimal.

This time of year, the smart money at the top of the yearly Tracker can be a good indicator. Just noticed that 4 of our top 5 have shifted over to the -G- (below).

Tracker.jpg

And in the longer term...I cannot overlook the technical damage that has been done over the past 3 months, especially evident in the -S- Fund (below).
After a 40% run-up in about 14 months, the small caps have leveled into a high volatility, crownish looking pattern that scarily resembles a top. The "lower low" we recently achieved is another worrisome trend breaker to keep in mind.

S Fund.jpg

Speaking about volatility, the VIX, after a steady 3-4 year glide, has suddenly changed direction in the past few months, and NOT for the better (below).
And thats NOT even counting the 8% upward gain the VIX was making early today.

VIX.jpg

Also uncertain about Fed announcement. Seems that whenever good news is assumed ahead of time, we get a run-up before the Fed announcement then its typically either "sell the good news" or "really sell fast the bad news". Hope I'm not a day late (and a dollar short) on this one.

Looking for an entry back into equities, but wit our recent runup we've garnered some overly bullish readings on several surveys.
Our own "Sentiment Survey" went overly bullish late last week (61% Bull vs 26% bear) which is a strong "sell signal". The strongest one this year.
A similar reading in late July set us up for a 3-5% dip.

Also the larger scale AAII Sentiment (graph and story link below) and reached very high bullish levels not seen in 4 years (preceding a 12-18% drop in the indices).

Sell Low, Buy High: Individual Investors Love Stocks Again | Tumblr Blog - Yahoo Finance

So will sit tight for now and avoid temptation...my nemesis this year which has often made me "buy high".

If there is a season for folly we are in it. I think this is a wave we can ride!!!

Better watch out...the "Dumb Money" is going in.

Going in from 100% G into 50% I and 50% S COB Today.

Actually only plan on this being a 1-2 day move. I agree with Tom, John Ross, JTH & others that we are way over-extended & ready for a quick snap back.

But I think this will wait till early next week. And I don't think it will be very serious, maybe just a 2-3% correction, then up and away into the holiday season, as our overall economy is not only on solid ground but is starting to fire up on most cylinders, along with low oil prices acting like a broad based tax cut.

So hope to garner some quick gains, but also plan on using my 2nd IFT Fri morning to go into the F fund.

Jason had some good analysis on it here:
JTH's Account Talk

A reason to continue to be optimistic.



The Federal Reserve isn't the deciding factor in our stock market anymore.

The deciding factors are growth and profits, and the U.S. has them in spades while everyone else doesn't.

Today's news U.S. GDP grew by 3.9%, the fastest back-to-back quarters in over three years,

That's proof the market's rally is backed by higher corporate profits and that consumers feel wealthier, more secure and confident.

Jim Cramer's 'Mad Money' Recap: Who Needs the Fed When U.S. Has Growth and Profits? - TheStreet

RIGHT! Interest rates!

Originally Posted by nnuut

RIGHT! Interest rates!

Yes those too. As Cramer says, thanks largely now to the ECB, China and Japan who, because of their slowing economies, have lowered their rates, in many cases lower than ours in the US, and that (according to Cramer) helps keep our rates from going up, despite our strong quarterly GDP near 4%.

Gotta hand it to Bernanke, Geithner and Summers, they played it beautifully back in 2009-2010, despite shrill naysayers crying "runaway inflation and rising interest rates are right around the corner" and now we're reaping the rewards today, the strongest economy in the world right now, with a stock market that the whole world wants to be in....which is why Cramer feels stocks will continue to punish the bears.

Oh yeah, who put that economic team together back in early 2009????

Originally Posted by FireWeatherMet

Gotta hand it to Bernanke, Geithner and Summers...

Oh yeah, who put that economic team together back in early 2009????

time will tell,

interesting, there is minimal inflation now so yesterday's free money syndrom is a thing of the past. inflation is like global warming i think, a similar arguement, the sins of our past always come back to haunt us.

sure there is no global warming now, but there's gonna be because of all the evil petro we've burnt and there's no stopping it. inflation is the same way, with a lag time between execution and evidence. sure we've reduced the deficit lately (the money in excess of what we earn) each year. but we have also increased the national debt (the total amount we owe more than we have) to $17 trillion since 2009, a frightening amount.

but life is easy, it is not us that will have to pay for global warming, just like it is not us that will have to pay for the national debt, it is our children that will pay. fortunately the delay between action and result means a different party executive will be in control when it all blows up so we can blame it on them instead.

if you think racking up $17 trillion of permanent debt via expanded entitlements and free dollar printing will not result in inflation, then i say the earth is cooling right now and has nothing to do with hydrocarbon consumption in the past.

you can't have it both ways cuz.

(i didn't mean to inject politics into an individual thread where one promotes one politician and ignores facts at the expense of another party, i just responded to it).

Originally Posted by burrocrat

if you think racking up $17 trillion of permanent debt via expanded entitlements and free dollar printing will not result in inflation, then i say the earth is cooling right now and has nothing to do with hydrocarbon consumption in the past.

you can't have it both ways cuz.

(i didn't mean to inject politics into an individual thread where one promotes one politician and ignores facts at the expense of another party, i just responded to it).

Its OK Burro, politics and economics often go together.
But the TOTAL DEBT is not really relevant here. nearly 11 trillion of it already existed from Regan, both Bush's and to a smaller degree..Clinton. We only hear about it from one partisan side who does not want to acknowledge the latest trend in the DEFICIT.
Its the DEFICIT that has a much stronger effect on our economy, although yes a huge debt means a larger annual interest payment, but with rates so low, even that is largely irrelevant.
The big thing is that our DEFICIT has been steadily shrinking past 3 years, thanks to an improving economy and expiration of some Bush tax cuts. We actually would be near a balanced budget in 2-3 years if it weren't for the Baby Boomer entitlements increasing exponentially at the same time.

So we currently have the best of all worlds:
- Shrinking Deficit
- Accelerating GDP
- Lowering Unemployment Rate
- Strongest stock market in the world.
- Low Oil Prices (acting like an added tax cut)
- Minimal Inflation.

Stop listening to grumpy old talking heads on F-O-X just looking for something to complain about...because of all the above points "they did not make that". They actually tried to obstruct all of it...and scare us out of stocks and into gold, runaway inflation and the "2nd Shoe to Drop Depression". So ignore all those from now on.

Just sit back and enjoy the economic conditions we're in right now. They don't come around very often.

Happy Thaksgiving

Originally Posted by FireWeatherMet

Better watch out...the "Dumb Money" is going in.

Going in from 100% G into 50% I and 50% S COB Today.

Actually only plan on this being a 1-2 day move. I agree with Tom, John Ross, JTH & others that we are way over-extended & ready for a quick snap back. It sometimes takes that long to verify, but when it does....

But I think this will wait till early next week. And I don't think it will be very serious, maybe just a 2-3% correction, then up and away into the holiday season, as our overall economy is not only on solid ground but is starting to fire up on most cylinders, along with low oil prices acting like a broad based tax cut.

So hope to garner some quick gains, but also plan on using my 2nd IFT Fri morning to go into the F fund.

Jason had some good analysis on it here:
JTH's Account Talk

Going out.
Along with current rise of 10-12% in past 6 weeks and Toms analysis of poor seasonality of 1st week of Dec I will chose logic over greed and temptation of extending equity position into early December.




But will add that I think our overall outlook remains very good and I plan to buy back in after our first brief dip in Dec...and stay in for awhile.

I like our market leaders John Ross and FireGal rationale for the F fund...although as was pointed out by JTH, all funds have been positive or negative together for 9 moths in a row.
JTH's Account Talk